THE finance minister has disclosed that an incremental expenditure of at least Rs110bn will be required this fiscal year to meet the expenses arising from the military’s Operation Zarb-i-Azb under way in North Waziristan and its larger fallout.

Of this, he says, Rs75bn will be used for the operation and Rs35bn for IDPs, which presumably includes the cost of reconstruction in populated areas that have been destroyed by the bombing. This is an out-of-budget expense, meaning it was not programmed into the expenditure plan in June 2014. The fiscal deficit target, already under pressure from declining revenues, will probably need to be revised upwards, with commitments to the IMF and implications for the fiscal framework, and other areas of the budget from where resources will have to be freed up to pay for this incremental expenditure.

But the finance minister must try and obtain greater disclosures from the military about how this money is being spent, even if those numbers are not to be made public. The government can afford this expense given the nature of the threat, but since it has ramifications for other areas of the budget, and because it is an off-budget item, it is important that there be at least some oversight to ensure that it is being spent wisely. The figure appears to suggest that the military operation may be larger than what we have been led to believe, both in its present execution as well as its future scope. Reportedly, two divisions are involved in the operation, and if their expenses can add up to such a huge sum then it is essential for the government to raise the right questions regarding these expenditures. If the costs of mobilising a small number of divisions can escalate so rapidly, then one wonders what the expenses would be in the event of a larger conflict, and how far the fiscal framework can sustain them. It is hoped that our rulers will focus on these concerns as they proceed with their plans.

Published in Dawn January 14th , 2015

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